EXHIBIT 10.32
EQUITY SUBSCRIPTION AGREEMENT
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THIS AGREEMENT is made as of March 27, 1998 by and among GLOBAL
IMAGING SYSTEMS INC., a Delaware corporation (the "COMPANY"), and Xxxxxx X.
Xxxxxxx, Golder, Thoma, Cressey, Rauner, Fund IV Limited Partnership, a Delaware
limited partnership, and Xxxxxxx National Life Insurance Company, a Michigan
life insurance company (collectively, the "PURCHASERS" and each individually a
"PURCHASER"). Except as otherwise indicated, capitalized terms used herein are
defined in paragraph 8 hereof.
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The parties hereto agree as follows:
1. AUTHORIZATION OF STOCK. The Company has authorized the issuance
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and sale to the Purchasers of an aggregate of 653.61 shares (the "STOCK"),
consisting of 580.456 shares of its Class B Common Stock, $.01 par value per
share (the "CLASS B COMMON") and 73.154 shares of its Class C Common Stock, $.01
par value per share (the "CLASS C COMMON"). The Stock is being issued to the
Purchasers pursuant to that certain option granted to Purchasers under the
Executive Agreement with Xxxxxx X. Xxxxxxx dated June 9, 1994, as amended (the
"XXXXXXX EXECUTIVE AGREEMENT").
2. PURCHASE AND SALE OF THE STOCK. The parties will execute and
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deliver counterparts of this Agreement on or about March 31, 1998. The
subscription by the Purchasers will occur at a closing ("CLOSING") to be held on
a date mutually satisfactory to the Purchasers and the Company not later than
March 31, 1998. At the Closing, the Company will sell to the Purchasers and,
subject to the terms and conditions set forth herein, the Purchasers will
purchase from the Company, an aggregate of 653.61 shares of Stock (580.456
shares of Class B Common and 73.154 shares of Class C Common) at a price of
$9.00 per share (in the aggregate, a total price of $5,882.49). The allocation
of the purchase of the Stock among each of the Purchasers is set forth in
Exhibit A hereto. The Closing of the purchase and sale of the Stock will be
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effected by exchange of documents, certificates and agreements, by air courier,
telefax or other means satisfactory to the parties. At the Closing, the Company
will issue and deliver to the Purchasers certificates evidencing the Stock to be
purchased by the Purchasers, registered in each Purchaser's name, against
payment of the purchase price therefor by check or wire transfer of funds in the
amount set forth for each Purchaser in Exhibit A hereto.
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3. CONDITIONS OF THE PURCHASERS' OBLIGATION AT THE CLOSING. The
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obligation of the Purchasers to purchase and pay for the Stock at the Closing is
subject to the satisfaction as of the Closing of the following conditions:
3A. REPRESENTATIONS AND WARRANTIES. The representations and
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warranties contained in paragraph 6 hereof will be true and correct at and as of
the Closing as though then made, except to the extent of changes caused by the
transactions expressly contemplated herein.
3B. CERTIFICATE OF INCORPORATION. The Company's Restated
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Certificate of Incorporation (the "CHARTER") as filed with the State of Delaware
will be in full force and effect at the Closing and will not have been further
amended or modified.
3C. PROCEEDINGS. All corporate and other proceedings taken or
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required to be taken in connection with the transactions contemplated hereby to
be consummated at or prior to the Closing and all documents incident thereto
will be satisfactory in form and substance to the Purchasers.
4. TRANSFER OF RESTRICTED SECURITIES.
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(i) Restricted Securities are transferable pursuant to (a)
public offerings registered under the Securities Act, (b) Rule 144 of
the Securities and Exchange Commission (or any similar rule then in
force) if such rule is available and (c) subject to the conditions
specified in subparagraph 4(ii) below, any other legally available
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means of transfer.
(ii) In connection with the transfer of any Restricted
Securities (other than a transfer described in subparagraph 4(i)(a) or
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(b) above), the holder thereof will deliver written notice to the
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Company describing the transfer or proposed transfer, together with an
opinion of Xxxxx & Xxxxxxx LLP or other counsel, which (to the
Company's reasonable satisfaction) is knowledgeable in securities law
matters, to the effect that such transfer of Restricted Securities may
be effected without registration of such Restricted Securities under
the Securities Act. In addition, if the holder of the Restricted
Securities delivers to the Company an opinion of Xxxxx & Xxxxxxx LLP
or such other counsel that no subsequent transfer of such Restricted
Securities will require registration under the Securities Act, the
Company will promptly upon such contemplated transfer deliver new
certificates for such Restricted Securities which do not bear the
Securities Act legend set forth in paragraph 9A. If the Company is
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not required to deliver such new certificates for such Restricted
Securities, the holder thereof will not transfer the same until the
prospective transferee has confirmed to the Company in writing its
agreement to be bound by the conditions contained in this paragraph
and paragraph 9A.
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5. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. Each of the
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Purchasers represents and warrants to the Company that he or it is purchasing
and will purchase the Stock for his or its own account, with no present
intention of distributing or reselling the Stock or any part thereof, and that
he or it is prepared to bear the economic risk of retaining the Stock for an
indefinite period, all without prejudice, however, to his or its right at any
time, in accordance with this Agreement, lawfully to sell or otherwise dispose
of all or any part of the Stock held by him or it. Each of the Purchasers also
represents and warrants that he or it is an accredited investor, as such term is
defined in Rule 501 of Regulation D promulgated under the Securities Act, and
that he or it has had the opportunity to ask questions of the Company's
management with respect to his or its investment. Each of the Purchasers also
represents and warrants that he or it has received the confidential offering
memorandum of the Company
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delivered to such Purchaser in accordance with applicable securities laws. Each
of the Purchasers agrees that if, and to the extent, he or it elects to sell the
Stock, he or it will do so in compliance with the provisions and requirements of
the Securities Act and applicable state securities laws. Each of the Purchasers
further represents that he or it has full authority to enter into the
transactions contemplated by this Agreement and to perform his or its
obligations hereunder. Further, each of the Purchasers represents and warrants
that the sale and issuance of the Stock has been properly allocated among each
of the Purchasers as set forth in any agreements between the Company and the
Purchasers and that no additional shares of the capital stock of the Company are
issuable to such Purchasers in connection herewith or therewith.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. As a material
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inducement to the Purchasers to enter into this Agreement and purchase the
Stock, the Company hereby represents and warrants that:
6A. ORGANIZATION AND CORPORATE POWER. The Company is a
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corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and is qualified to do business in every jurisdiction
in which the failure so to qualify might reasonably be expected to have a
material adverse effect on the financial condition, operating results or
business prospects of the Company. The Company has all requisite corporate power
and authority and all material licenses, permits and authorizations necessary to
own and operate its properties, to carry on its businesses as now conducted and
presently proposed to be conducted and to carry out the transactions
contemplated by this Agreement. The copies of the Company's Charter and bylaws
that have been furnished to the Purchasers' counsel reflect all amendments made
thereto at any time prior to the date of this Agreement and are correct and
complete.
6B. CAPITAL STOCK AND RELATED MATTERS. Based in part on the
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investment representations of the Purchasers in paragraph 5 above, the Company
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has not violated any applicable federal or state securities laws in connection
with the offer, sale or issuance of any of the Stock, and the offer, sale and
issuance of the Stock hereunder do not require registration under the Securities
Act or any applicable state securities laws. To the best of the Company's
knowledge, there are no agreements among the Company's stockholders with respect
to the voting or transfer of the Company's capital stock or with respect to any
other aspect of the Company's affairs that would conflict with the provisions of
this Agreement..
6C. AUTHORIZATION; NO BREACH. The execution, delivery and
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performance of this Agreement and all other agreements contemplated hereby to
which the Company is a party have been duly authorized by the Company. This
Agreement and all other agreements contemplated hereby each constitutes a valid
and binding obligation of the Company, enforceable in accordance with its terms.
The execution and delivery by the Company of this Agreement and all other
agreements contemplated hereby to which the Company is a party, the offering,
sale and issuance of the Stock hereunder, and fulfillment of and compliance with
the respective terms hereof and thereof by the Company, do not and will not (i)
conflict with or result in a breach of the terms, conditions or provisions of,
(ii) constitute a default under, (iii) result in the creation of any lien,
security interest, charge or encumbrance upon the Company's capital stock or
assets pursuant to, (iv) give any third party the right to accelerate any
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obligation under, (v) result in a violation of, or (vi) require any
authorization, consent, approval, exemption or other action by or notice to any
court or administrative or governmental body pursuant to, the Charter or bylaws
of the Company, or any law, statute, rule or regulation to which the Company is
subject, or any agreement, instrument, order, judgment or decree to which the
Company is a party or by which it is bound.
6D. BROKERAGE. There are no claims against the Company for
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brokerage commissions, finders' fees or similar compensation in connection with
the transactions contemplated by this Agreement based on any arrangement or
agreement binding upon the Company.
6E. GOVERNMENTAL CONSENT, ETC. No permit, consent, approval or
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authorization of, or declaration to or filing with, any governmental authority
is required in connection with the execution, delivery and performance by the
Company of this Agreement or the other agreements contemplated hereby, or the
consummation by the Company of any other transaction contemplated hereby or
thereby.
6F. COMPLIANCE WITH LAWS. The Company is not in violation of any
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law or any regulation or requirement which violation might reasonably be
expected to have a material adverse effect upon the financial condition,
operating results or business prospects of the Company and the Company has not
received notice of any such violation.
6G. DISCLOSURE. Neither this Agreement nor any of the schedules,
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attachments, written statements, documents, certificates or other items prepared
or supplied to the Purchasers by or on behalf of the Company with respect to the
transactions contemplated hereby contains any untrue statement of a material
fact or omits a material fact necessary to make each statement contained herein
or therein not misleading. There is no fact which the Company has not disclosed
to the Purchasers in writing and of which any of its officers, directors or
executive employees is aware and which could reasonably be anticipated to have a
material adverse effect upon the existing or expected financial condition,
operating results, assets, customer relations, employee relations or business
prospects of the Company.
6H. CLOSING DATE. The representations and warranties of the
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Company contained in this paragraph 6 and elsewhere in this Agreement and all
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information contained in any exhibit, schedule or attachment hereto or in any
writing delivered by, or on behalf of, the Company to any Purchasers will be
true and correct in all material respects on the date of the Closing as though
then made, except as affected by the transactions expressly contemplated by this
Agreement.
7. REPURCHASE OF SHARES. Notwithstanding anything to the contrary
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contained in this Agreement, the Purchasers hereby agree that the Company shall
have the right to repurchase all of the Stock from the Purchasers at a price per
share equal to $9.00 per share, in the event that the Company's initial public
offering registered under the Securities Act is not closed on or before July 31,
1998 (the "IPO"). In the event the IPO does not occur prior to July 31, 1998,
the Company shall have 30 days thereafter to redeem all, but not less than all,
of the Stock from the Purchasers in accordance with the terms of this paragraph
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7. Each of the
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Purchasers further agrees not to transfer the Stock on or prior to August 31,
1998 without getting the transferee thereof to deliver its agreement in writing
to the Company to be bound by the terms and conditions set forth in this
paragraph 7. The provisions of this paragraph 7 will terminate on the closing of
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the IPO.
8. DEFINITIONS. For the purposes of this Agreement, the following
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terms have the meanings set forth below:
"PERSON" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization or a governmental entity or any department, agency or political
subdivision thereof.
"RESTRICTED SECURITIES" means the Stock issued hereunder, and any
securities issued with respect thereto by way of a stock dividend or stock split
or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization. As to any particular Restricted
Securities, such securities will cease to be Restricted Securities when they
have (a) been effectively registered under the Securities Act and disposed of in
accordance with the registration statement covering them, (b) become eligible
for sale and have actually been sold to the public pursuant to Rule 144 (or any
similar provision then in force) under the Securities Act or (c) been otherwise
transferred and new certificates for them not bearing the Securities Act legend
set forth in paragraph 9A have been delivered by the Company in accordance with
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subparagraph 4(ii). Whenever any particular securities cease to be Restricted
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Securities, the holder thereof will be entitled to receive from the Company,
without expense, new securities of like tenor not bearing a Securities Act
legend of the character set forth in paragraph 9A.
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"SECURITIES ACT" means the Securities Act of 1933, as amended, or
any similar federal law then in force.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended, or any similar federal law then in force.
"SUBSIDIARY" means any corporation of which the securities having
a majority of the ordinary voting power in electing the board of directors are,
at the time as of which any determination is being made, owned by the Company
either directly or through one or more Subsidiaries.
9. MISCELLANEOUS.
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9A. RESTRICTIVE LEGEND. Each certificate for Restricted
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Securities will be imprinted with a legend in substantially the following form:
The securities represented by this certificate have not
been registered under the Securities Act of 1933, as
amended. The transfer of the securities represented by
this certificate is subject to the conditions specified
in the Equity
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Subscription Agreement, dated as of March 27, 1998, by
and between the issuer (the "COMPANY") and a certain
investor, and the Company reserves the right to refuse
the transfer of such securities until such conditions
have been fulfilled with respect to such transfer. A
copy of such conditions will be furnished by the Company
to the holder hereof upon written request and without
charge.
9B. SUCCESSORS AND ASSIGNS. Except as otherwise expressly
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provided herein or in any instruments of transfer or assignment, all covenants
and agreements contained in this Agreement by or on behalf of any of the parties
hereto will bind and inure to the benefit of the respective successors and
assigns of the parties hereto whether so expressed or not. In addition, and
whether or not any express assignment has been made, the provisions of this
Agreement which are for the Purchasers' benefit as a purchaser or holder of
Stock are also for the benefit of, and enforceable by, any subsequent holder of
such Stock.
9C. COUNTERPARTS FACSIMILE SIGNATURES. This Agreement may be
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executed simultaneously in counterparts, both of which need not contain the
signatures of more than one party, but both such counterparts taken together
will constitute one and the same Agreement. This Agreement may be executed by
facsimile transmission.
9D. GOVERNING LAW. This Agreement will be governed by the
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internal law, and not the law of conflicts, of Delaware.
9E. NOTICES. All notices, demands or other communications to be
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given or delivered under or by reason of the provisions of this Agreement will
be in writing and will be deemed to have been given when delivered personally,
or sent by telex or facsimile transmission, or sent by receipted air courier, or
mailed by certified or registered mail, return receipt requested and postage
prepaid, to the recipient. Such notices, demands and other communications will
be sent to the Company and the Purchasers at the address indicated below:
Notice to the Company
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Global Imaging Systems Inc.
X.X. Xxx 000000
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Notice to the Purchasers
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At the addresses listed on the Company's stockholder records
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
GLOBAL IMAGING SYSTEMS, INC.
By: /s/ Xxxxxxx Xxxxxxxxx
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Xxxxxxx Xxxxxxxxx, Executive Vice
President and Chief Financial Officer
PURCHASERS:
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
GOLDER, THOMA, CRESSEY, RAUNER, FUND IV LIMITED
PARTNERSHIP
By: GTCR IV, L.P.
Its: General Partner
By: Golder, Thoma, Xxxxxxx, Xxxxxx Inc.
Its: General Partner
By: /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
Authorized Officer
XXXXXXX NATIONAL LIFE INSURANCE COMPANY
By: /s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
Its:__________________________________
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EXHIBIT A
LIST OF PURCHASERS
AMOUNT OFFERED SHARES OF
NAME AND ADDRESS ($) CLASS B STOCK
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Xxxxxx X. Xxxxxxx $ 615.44 68.382
Golder, Thoma, Xxxxxxx, Xxxxxx Fund IV, $4,608.67 512.074
X.X.
Xxxxxxx National Life Insurance Company $ 658.38 73.154*
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Total 5,882.49 653.61
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* Xxxxxxx National Life Insurance Company will aqcuire Class C Common Stock in
lieu of Class B Common Stock.
